FIGURE 14-7 -Refer to Figure 14-7.The Diagonal Line in the Diagram

question 7

Multiple Choice

FIGURE 14-7
-Refer to Figure 14-7.The diagonal line in the diagram

• A)illustrates the functional distribution of income.
• B)shows where the Lorenz curve would be if there were complete income equality.
• C)shows the actual distribution of income.
• D)has no real purpose.
• E)shows the distribution of income over time.

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Definitions:

Fixed Cost

Expenses that do not change with the level of output production, such as rent, salaries, or equipment leases.

Output

The quantity of a product or service produced within a given period by a company, sector, or economy.

Long-Run Average Total Cost Curve

A graphical representation showing how the average total cost of production varies with output level in the long run, when all inputs are variable.

Short Run

A period in economics during which at least one factor of production is fixed, limiting the ability to fully adjust to new market conditions.